I don't feel like explaining it in depth tbh, so there's this comment thread.
https://www.reddit.com/r/learnprogramming/comments/nmliyu/comment/gzpl1k4/?utm_source=share&utm_medium=web2x&context=3
The reason why I would not call it an IDE is that it is designed as a lightweight code editor first. The build/debug environment is not integrated, you can keep things separated, which is what I like about it. If you want an integrated environment, VS code lets you integrate it yourself because it is extensible. The power you get from VS code's extensibility makes it seem like an IDE at times, but it is clearly a different beast entirely when you compare it to Visual Studio IDE.